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LIMITED LIABILITY COMPANIESA new form of doing business that has becomecommon today is known as the limited liabilitycompany. One of the chief advantages of alimited liability company is that it is taxed like apartnership. What formalities must be followedto create a limited liability company?616 Unit 6: Starting a BusinessCorporate Bonds A corporation may also finance its activitiesthrough bonds, which are notes issued for money that the corporationborrows. When a company makes bonds available, it is called a bondissue. Unlike stocks, bonds accrue interest and must be repaid in thefuture. If a company files for bankruptcy, bondholders’ claims to companyassets are paid before those of shareholders.Forming a Limited Liability CompanyA limited liability company (LLC) is a new type of businessenterprise that has been adopted by all states. An LLC combines thebest features of a partnership and a corporation. Like a corporation, itoffers limited liability to its owners. Like the partners in a partnership,the owners of an LLC escape double taxation. LLCs are statutory entities,which means they can be formed only if the owners follow the legalsteps required. The owners of an LLC are known as members, and thepeople who run the LLC are known as managers.Generally, the law permits one legal person to form an LLC. Thefirst step in forming an LLC is to draw up the articles of organization.